UK car scrappage scheme begins

Motorists with cars more than 10 years old can now swap them for £2,000 to spend on a brand new model as the Government's car-scrappage scheme begins.

Car manufacturers are hoping that the "cash for bangers" incentive will kick start the ailing motor industry, which has seen the number of new car sales fall for 11 consecutive months.

The Government pledged £300 million in the Budget to give motorists the opportunity to exchange their old cars for a brand new, and potentially more environmentally friendly, vehicle using the cash incentive.

Manufacturers are putting forward half of the fund and the scheme will run until the end of February 2010 or until the £300 million government funding runs out.

Although the UK scheme is voluntary, all the major manufacturers have signed up and many are planning to continue their own sales incentives on top of the scrappage deal.

Scrappage schemes in Europe have already proved a success, with new car sales in Germany increasing by 40% in March this year.

Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, said: "There has been a good response to the scheme ahead of the official start date and industry is confident that this will be translated into additional orders."

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